ASX Exchange Will Move Into DLT Settlement System By 2020

The Australian Securities Exchange (ASX) is planning on replacing its CHESS clearing and settlement system with a distributed ledger technology (DLT).

Additional information on the system’s progress towards production launch were included in an 87-page consultation paper published on Friday, where it specifies a timeline for when the switch will be made as well as detailed descriptions of functions it will and won’t support.

ASX is eyeing a rollout date of sometime during 2020 or the first quarter of 2021. In the meantime, ASX will be collecting early feedback on its plans as they are today.

“Depending on the extent of consultation feedback received, ASX expects to provide a final functional scope and implementation roadmap in late July 2018,” the firm explains at the beginning of the report.

ASX has been studying the idea of using a distributed ledger technology as early as 20145. In December, it announced that it would be the first major stock exchange in the world to utilize DLT for post-trade settlement. ASX will be using technology developed together with Digital Asset, a blockchain-based startup managed by Blythe Masters, former JPMorgan and Chase executive. ASX also owns a stake in Digital Asset.

ASX’s embrace of DLT is noteworthy, especially after emerging from a years-long research period. ASX Deputy CEO Peter Hiom said that their decision to launch a DLT-based system was to “demystify the technology for others in the industry”.